Credit Union Affairs

Wednesday, January 09, 2013

Don't Worry! Happens All The Time...

Too little, Too late, Too often...

Well, as many of you know, it's time once again for credit unions to file year-end financial statistics with NCUA on Form 5300 (the "Call Reports"). The data is filed by both federally-chartered CUs and by federally-insured, state-chartered CUs (FISCUs). NCUA considers the call reports as critical to national security, much like CAMEL codes, and becomes rather "poutish" when even minor, seemingly inconsequential, errors are found.

NCUA Call Report Training....

Under the current regime, NCUA has even been known to slap CUs with regulatory "Documents of Resolutions" ("DORs") - sort of like regulatory water-boarding - and with adverse examination "Findings" - similar to a gleeful flogging - for instances of type-itis, fat thumbery, and Excel-o-dramas. Like your least favorite third grade teacher, NCUA expects:

"CREDIT UNIONS PLEASE CHECK YOUR WORK !!"

But, guess what....

The"sacred" instructions for the December 31 Call Report include the following:

"Part 701.4 Certification

Each federally-insured credit union is required to have policies to make available training to enhance the knowledge of directors, commensurate with the size and complexity of the credit union. Compliance with this regulation is documented in the online system."

So what's the problem? Well, perhaps several things: 1) Part 701.4 applies only to federally-chartered CUs; 2) the rule has been around since 2011 and after 2 years NCUA stillcan't get it's act together; 3) NCUA has a vibrant track record for - some say willfully and intentionally - failing to recognize the separate legal status and separate legal rights of state-chartered CUs; 4) at the next NCUA Board meeting NCUA will abrogate (means "despite the law") additional rights from state-chartered CUs; and 5) NCUA does not feel it is answerable to anyone - particularly CUs - for their frequent, continuing, and very elementary, unforced errors.

But, we're so aDORable...!!

Now, I might agree with you that this all just sounds like "a bunch of whining"( 'cause "Everybody makes misteaks - right?" - precisely!!!!). But here's the rub; look at NCUA's response to a polite inquiry concerning the error, creating the inability of a state-chartered CU to truthfully certify and file its December call report:

"There is an error in CU Online where the Section Part 701.4 certification is showing to FISCUs and should not be . We are aware of the problem and will correct this by the March cycle."

"Hey, don't worry! Happens all the time around here! We knew about it, but didn't see any need to let you know.... and really, this only affects the 2700 or so state-chartered CUs! We'll clean up our act when we get around to it in a couple of months. Tough Luv Ya', Baby !!"It is extremely instructive about the overall attitude within the Agency that it appearsno acknowledgement of this known error appears to be forthcoming, no notification, no self-applied DOR, and most certainly no inkling of an apology.(An apology would be shocking... if not downright Mayan !!)

An exam "finding"....

It is also instructive that we all receive a blizzard of NCUA Express bulletins with quotes and pix of NCUA officialdom every time a dog takes a......in DC; but on important matters...??Yes! Think we should all support Board training at both federal and state-chartered CUs, but there is obviously "another"Board which CUs and taxpayers should expect to be trained and to be held accountable.....

2 comments:

Anonymous
said...

Seems if you sign the 5300 and you are a State Chartered Credit Union official you are not adequately educated. It would be an admission that you do not know the difference between a Federal or a State Charter and the rules that apply to them!

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Jim Blaine lives in the woods in rural North Carolina. He is slightly balding, can be testy, is not getting thinner, has been known to argue and has at least one opinion on everything. Jim thinks he can dance, but he really can’t; likes most people and some dogs. He is a graduate of UNC-Chapel Hill, holds an MBA from Duke University and is also a CPA (inactive). Jim has worked with the State Employees’ Credit Union and has served unsuccessfully on numerous boards and committees. His grandchildren call him “Sweetbaby", but they are still too young to know better.